the accompanying notes to the unaudited pro forma carve-out financial statements;

the unaudited historical carve-out financial statements of the Outdoor Business of CCH as of March 31, 2019 and for the three-month periods ended March 31, 2019 and 2018 included in this Form 8-K; and

the audited historical carve-out financial statements of the Outdoor Business of CCH for the year ended December 31, 2018 not included in this Form 8-K.

ASSETS

Cash and cash equivalents

Accounts receivable, net of allowance

Prepaid expenses

Other current assets

Total Current Assets

PROPERTY, PLANT AND EQUIPMENT

Structures, net

Other property, plant and equipment, net

INTANGIBLE ASSETS AND GOODWILL

Indefinite-lived intangibles - permits

Other intangible assets, net

Goodwill

OTHER ASSETS

Operating lease right-of-use assets

Due from iHeartCommunications

Other assets

Total Assets

CURRENT LIABILITIES

Accounts payable

Current operating lease liabilities

Accrued expenses

Deferred income

Current portion of long-term debt

Total Current Liabilities

Long-term debt

Noncurrent operating lease liabilities

Due to iHeartCommunications - post petition

Mandatorily redeemable preferred stock

Deferred income taxes

Other long-term liabilities

Commitments and contingent liabilities

COMPANY DEFICIT

Noncontrolling interest

Majority owner’s net investment

New CCOH common stock, par value $.01 per share

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive income

Total Company Deficit

Total Liabilities and Company Deficit

Revenue

Operating expenses:

Direct operating expenses (excludes depreciation and amortization)

Selling, general and administrative expenses (excludes depreciation and amortization)

Corporate expenses (excludes depreciation and amortization)

Depreciation and amortization

Other operating expense, net

Operating income

Interest expense

Equity in earnings (loss) of nonconsolidated affiliates

Loss on extinguishment of debt

Other expense, net

Loss before income taxes

Income tax expense

Net loss

Revenue

Operating expenses:

Direct operating expenses (excludes depreciation and amortization)

Selling, general and administrative expenses (excludes depreciation and amortization)

Corporate expenses (excludes depreciation and amortization)

Depreciation and amortization

Impairment charges

Other operating income, net

Operating income

Interest expense

Interest income on Due from iHeartCommunications Note

Equity in earnings (loss) of nonconsolidated affiliates

Other expense, net

Loss before income taxes

Income tax expense

Net loss

CCH was released from its guarantees of all of iHeartCommunications’ pre-petition indebtedness and its guarantee of the iHeartCommunications debtor-in-possession credit facility.

The equity interests of all of the subsidiaries of CCH, other than CCOH, were transferred to iHeart Operations, Inc. (“Radio Newco”) in exchange for common stock and preferred stock of Radio Newco, and CCH sold preferred stock of Radio Newco to third parties for cash.

CCH distributed the common stock of Radio Newco, and the proceeds of the sale of the Radio Newco preferred stock, to iHeartCommunications.

The outstanding shares of Class B common stock of Old CCOH (the “Old CCOH Class B Common Stock”) were converted into shares of Class A common stock of Old CCOH (the “Old CCOH Class A Common Stock” and together with the Old CCOH Class B Common Stock, the “Old CCOH Common Stock”).

Old CCOH merged (the “Merger”) with and into CCH with CCH surviving and changing its name to Clear Channel Outdoor Holdings, Inc. (the “Company”).

The outstanding shares of Old CCOH Class A Common Stock held by the public stockholders of Old CCOH were converted in the Merger into an equal number of shares of Common Stock of the Company.

The Company sold Series A Perpetual Preferred Stock (the “Preferred Stock”) to third parties for cash.

iHeartCommunications transferred the shares of Common Stock it owns to holders of claims pursuant to the iHeartMedia Plan of Reorganization, other than 31,269,762 shares subject to the iHeart Warrants.

The cash sweep agreement under the Corporate Services Agreement and any agreements or licenses requiring royalty payments to iHeartMedia and its affiliated debtor entities (the “Debtors”) by CCOH for trademarks or other intellectual property (“Trademark License Fees”) were terminated.

iHeartMedia and the Company entered into a new Transition Services Agreement to provide administrative services currently and historically provided to CCOH by iHeartCommunications.

The Trademark License Fees charged during the post-petition period were waived by the Debtors.

The post-petition intercompany balance due to iHeartCommunications was repaid, after being adjusted for the Trademark License Fees charged to CCOH during the post-petition period.

iHeartMedia contributed the rights, title and interest in and to all tradenames, trademarks, service marks, common law marks and other rights related to the Clear Channel tradename (the “CC Intellectual Property”) to the Company.

The Debtors paid $107.0 million to the Company, which consisted of the $149.0 million recovery of the Company’s claim under the Due from iHeartCommunications Note, adjusted for the amount owed to iHeartCommunications related to the post-petition intercompany balance.

iHeartCommunications entered into a credit agreement with Clear Channel Outdoor, LLC, a wholly-owned subsidiary of the Company, to provide a line of credit in an aggregate amount not to exceed $200 million at the Prime rate of interest.

The issuance by the Company of 45,000 shares of Preferred Stock for cash in an aggregate amount equal to $44.3 million, net of issuance costs. The Preferred Stock includes repurchase rights, pursuant to which the holders of Preferred Stock may require a designated subsidiary of the Company to purchase the shares after the fifth anniversary of issuance. In addition, upon occurrence of (i) any change of control, (ii) a liquidation, dissolution, or winding up or (iii) certain insolvency events, each holder may require the Company to redeem for cash all of the then outstanding shares of Preferred Stock. On the tenth anniversary of the issue date of the Preferred Stock, the shares of Preferred Stock will be subject to mandatory redemption for an amount equal to the liquidation preference. As a result, the Preferred Stock is mandatorily redeemable and is therefore classified as a liability in the unaudited pro forma balance sheet.

The settlement of the Due from iHeartCommunications Note, the post-petition intercompany balance between iHeartCommunications and CCOH and the net payment to the Company of $107.0 million on the effective date of the Merger (the “Effective Date”). The Separation Agreement provided for (i) the repayment of the post-petition intercompany balance outstanding in favor of the Debtors as of December 31, 2018, which was equal to $21.6 million as of that date and (ii) the waiver of the set-off value of any royalties and IP license fees owed to iHeartCommunications equal to approximately $31.8 million from March 14, 2018 through December 31, 2018, such that the resulting intercompany balance on December 31, 2018 was $10.2 million in favor of CCOH. From January 1, 2019 through March 31, 2019, CCOH incurred an additional intercompany liability of $52.1 million in favor of iHeartCommunications. Pursuant to an amendment to the Separation Agreement dated April 24, 2019, CCOH agreed to offset the $149.0 million recovery of CCOH’s claims under the Due from iHeartCommunications Note and the $10.2 million amount owed by iHeartCommunications as discussed above by $52.1 million.

The contribution by iHeartCommunications of the CC Intellectual Property to CCOH, which was recorded at its historical book value of $83.9 million.

The issuance and conversion of shares of common stock in the Merger. Each share of Old CCOH Class A Common Stock (other than shares of Old CCOH Class A Common Stock held by CCH and its subsidiaries) (approximately 325,726,917 shares as of March 31, 2019, after giving effect to the conversion of Old CCOH Class B Common Stock to Old CCOH Class A Common Stock, which happened prior to the Merger) issued and outstanding immediately prior to the Merger were cancelled and converted into the right to receive one share of New CCOH Common Stock. Each share of Old CCOH Class A Common Stock held by CCH and its subsidiaries were cancelled and retired, and no shares of New CCOH Common Stock were exchanged for such shares. The outstanding shares of CCH’s common stock immediately before the Merger converted into a number of shares of New CCOH Common Stock equal to the number of shares of Old CCOH Common Stock held by CCH immediately before the Merger (325,726,917 shares). As a result, the Company had approximately 365,618,611 shares outstanding upon consummation of the Transactions.

The re-designation of majority owner’s net investment in CCH as stockholders’ accumulated deficit. As a result of the Separation, (i) the majority owner’s net investment in CCH will be re-designated as stockholders’ deficit, (ii) the Company’s additional paid-in capital will reflect Old CCOH’s additional paid-in capital, as adjusted for the elimination of Old CCOH’s treasury stock, the contribution of the CC Intellectual Property and the waiver of the set-off value of any royalties and IP licenses owed to iHeartCommunications and (iii) the Company’s accumulated deficit will reflect Old CCOH’s accumulated deficit, plus the $5.8 million loss on the settlement of the Due from iHeartCommunications Note.

The $77.6 million increase in deferred tax liabilities results from a reduction of deferred tax assets for federal and state net operating loss carryforwards that occurred at the time of Separation, which is offset in part by a reduction in valuation allowance. Upon completion of the Separation and in connection with iHeartMedia’s emergence from bankruptcy proceedings under Chapter 11 of the Bankruptcy Code, the Company’s federal and state net operating loss carryforwards will be reduced in accordance with Code Section 108 due to cancellation of debt income, which is not includable in U.S. federal taxable income. The estimated remaining federal and state net operating loss carryforwards upon Separation is zero. Additionally, as a result of the series of transactions to effect the Separation, the Company expects to generate a federal capital loss carryforward which will be available to offset capital gains that may arise in future periods. The resulting deferred tax asset of $120 million is fully offset by valuation allowance in the pro forma adjustment to deferred income taxes.

Elimination of interest income of $0.4 million recognized on the post-petition balance owed by iHeartCommuncations for the year-ended December 31, 2018 and the elimination of interest expense of $0.8 million recognized on the post-petition balance owed to iHeartCommunications for the three months ended March 31, 2019.

Elimination of trademark license fees of $38.6 million for the year ended December 31, 2018 charged to CCOH under any agreements or licenses requiring royalty payments to the Debtors by CCOH for trademarks or other intellectual property. No trademark license fees were incurred during the three months ended March 31, 2019.

Increase in amortization expense of $2.2 million and $9.0 million for the three months ended March 31, 2019 and the year ended December 31, 2018, respectively, as a result of the contribution of the CC Intellectual Property to CCOH with a remaining useful life of 9.3 years as of March 31, 2019.

For the year ended December 31, 2018, net increase in interest expense of $40.2 million, resulting from the elimination of interest recognized on the Old CCWH Subordinated Notes of $171.9 million and the addition of pro forma interest expense of $212.1 million on the New CCWH Subordinated Notes.

Increase in interest expense of $1.2 million and $4.6 million for the three months ended March 31, 2019 and the year ended December 31, 2018, respectively, related to the issuance of the Preferred Stock. As described above, the Preferred Stock is mandatorily redeemable and classified as a liability, with dividends reflected as interest expense in these unaudited pro forma carve out financial statements.

The adjustments to income tax expense have been calculated assuming a 25% statutory tax rate for the three months ended March 31, 2019 and the year ended December 31, 2018, which is comprised of the U.S. federal tax rate of 21% and a blended 4% rate to account for the various state and local tax jurisdictions in which the Company operates. The effects on income tax expense attributed to the reduction in the deferred tax assets for net operating loss carryforwards and the adjustments to the opening balance of valuation allowance are not included in the unaudited pro forma carve-out statement of operations because the items are non-recurring in nature.